Member-only story
Reimagine The Workforce
Retailers Need To Rethink Employee Retention
One of the biggest challenges facing retailers today is employee turnover. According to McKinsey & Company, the annual turnover rate for retailers is around 60%. Some estimates say the cost of replacing an employee can be as high as 1.5 to 2x the annual cost of that employee’s salary.
High turnover rates have a staggering impact on businesses for a variety of reasons. While retraining expense is the most obvious place where employers are impacted, they should not lose sight of the impact that poor retention has on their customers. Lower quality service and the inability to have employees that consistently build relationships with clientele can have an even larger, if harder to quantify, impact on the business.
Another major impact of employee turnover is the loss of institutional knowledge, sometimes referred to as tribal knowledge. This is the information that is often undocumented about how things are done or even where to find that information. Knowledge management systems can help mitigate the impact of turnover, but nothing eliminates this issue other than retaining employees.
What should employers do to minimize turnover and keep their employees? Most seem to focus on pay scale. While this is important, it is also an old approach. If this was the…
